Court lifts unjunction barring payments for Russian engine

Editor's note...
  • Posted at 06:10 PM ET, 05/08/14: Court lifts injunction barring payments for Russian rocket engines
  • Updated at 07:00 PM ET, 05/08/14: Adding SpaceX statement
CBS News

A federal judge Thursday lifted an injunction barring United Launch Alliance from buying Russian engines for the company's Atlas 5 rocket, concluding such transactions do not violate U.S. sanctions imposed in the wake of Russia's actions in Ukraine.

A temporary injunction was granted April 30, two days after a complaint by ULA rival Space Explorations Technologies -- SpaceX -- that challenged the legitimacy of a sole-source "block buy" Air Force contract that was awarded to United Launch Alliance last December for 27 Atlas 5 and Delta 4 rockets.

ULA is a partnership between Boeing, builder of the Delta family of rockets, and Lockheed Martin, builder of the Atlas 5.

At the time the block buy contract was awarded, ULA's rockets were the only U.S. launchers that were fully certified for use by national security spy satellites and other high-priority military payloads.

But SpaceX argued it should have been allowed to bid on at least some of the rockets because Air Force certification is only required for launch, not for contract consideration. The company's Falcon 9 rocket is expected to complete the certification process later this year.

As part of its complaint, SpaceX alleged that ULA payments to NPO Energomash, builder of the Atlas 5's RD-180 first-stage engine, may have personally profited Dmitry Rogozin, Russia's deputy prime minister for space and defense projects. Rogozin is on a list of senior Russian officials covered by Obama administration sanctions spelled out in Executive Order 13661.

SpaceX claimed "the Air Force is sending millions of dollars directly to an entity controlled by Russia and to an industry led by an individual identified for sanctions."

Two day later, Judge Susan G. Braden of the U.S. Court of Federal Claims granted a temporary injunction barring United Launch Alliance and its subsidiaries "from making any purchases from or payment of money to NPO Energomash or any entity ... that is subject to the control of Deputy Prime Minister Rogozin" until the court could hear opinions from the departments of State, Commerce and Treasury as to whether such payments did or did not violate the sanctions against Rogozin.

All three did just that, with the Treasury Department saying in a letter to the court that "to the best of our knowledge, purchases from and payments to NPO Energomash currently do not directly or indirectly contravene Executive Order 13661. We will inform you promptly should this situation change."

As a result, Braden dissolved the preliminary injunction, leaving the door open for additional action if the situation changes.

"If the government receives any indication, however, that purchases from or payment of money to NPO Energomash ... will directly or indirectly contravene Executive Order 13661, the government will inform the court immediately," she concluded.

In a statement released earlier, ULA said the Treasury Department letter and a hearing Thursday "makes clear that ULA's purchase of the RD-180 engines from our suppliers and partners, RD AMROSS and NPO Energomash, complies with the sanctions against Russia."

RD AMROSS, a partnership between NPO Energomash and Pratt & Whitney Rocketdyne, markets the RD-180 in the United States.

"Sadly, SpaceX's frivolous lawsuit caused unnecessary distraction of the executive and judicial branch and increased tensions with Russia during a sensitive national security crisis," ULA said in its statement. "SpaceX's actions are self-serving, irresponsible and have threatened the U.S.'s involvement with the International Space Station and other companies and projects working with Russian State entities."

As for the larger question of whether the Air Force block buy of 27 rockets should be reviewed, ULA said "we continue to hope that SpaceX will revisit their underlying lawsuit and the merits of their case," adding that "even today SpaceX is not certified to launch even one mission under the block buy contract."

In a statement, SpaceX said the company stood by its initial complaint.

"The U.S. Court of Federal Claims has taken steps toward understanding whether United Launch Alliance's current sole-source contract violates U.S. sanctions by sending taxpayer money to Russia for the RD-180 engine," SpaceX said.

"That question, combined with the others specifically raised in the SpaceX complaint, relating to the risks posed by dependence on Russian-made engines and the need to open competition for the Air Force space launch program, are timely and appropriate."